FreightCar America, Inc. v. National Steel Car Limited

The Director granted Patent Owner's request for Director Review, vacated the decision granting institution, and denied institution. After institution, Patent Owner disclaimed claim 24 and dependent claims 25-31, the only claims for which the Board had found a reasonable likelihood of unpatentability. Those claims are treated as though they never existed. The Board had found no reasonable likelihood as to any remaining claim, so maintaining the IPR would be an inefficient use of Office resources. A post-institution disclaimer of the only claims on which the Board found a reasonable likelihood can lead the Director to vacate institution and deny the petition. The reason given is efficient use of Office resources, and no error in the institution decision was needed. A patent owner in this position can seek Director Review promptly, and a petitioner should expect the disclaimer to be treated as removing those claims from the case. Decision under review: the Board's institution decision (Paper 27), which found a reasonable likelihood that claim 24 was unpatentable but questioned or found that Petitioner did not appear to show unpatentability of independent claims 1, 7, 18, 20 and 32 or their dependent claims. Patent Owner's request argued that it had disclaimed the claims on which institution rested, and that proceeding would be inefficient when Petitioner had not shown a reasonable likelihood as to any remaining claim. Petitioner opposed. It argued that the request identified no error in the Board's Decision and relied on new evidence, namely the post-institution disclaimer. The Director noted that Patent Owner disclaimed claim 24 and claims 25-31, which depend from it. Citing Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996), the Director treated the patent as though the disclaimed claims never existed. With claims 24-31 treated as nonexistent and no reasonable likelihood found for any remaining claim, the Director concluded that maintaining the IPR is an inefficient use of Office resources. The Director ordered that Director Review is granted, the institution decision (Paper 27) is vacated, and the petition is denied with no trial instituted. KEY QUOTE: "Accordingly, the Decision is vacated, and institution is denied." (Paper 49, p. 3)